What Causes Home Loan Rejections in India

You took every precaution, yet you’re still apprehensive about the status of your loan application. Being turned down for a house loan is the worst feeling, especially when you really need one. Before you hurry into the next bank to apply for your next house loan, be sure you’ve explored all of your choices. The applicant’s CIBIL score check might be one of the key causes for home loan refusal. Banks will reject an application if the applicant has a poor online CIBIL Score.

Common Reasons for Home Loan Rejection

Here are some of the most common reasons why your home loan application was denied. The causes are as follows:

The Age of the Applicant

If the borrower is reaching retirement age, his or her house loan application will be declined. The lender is cautious to lend to such clients because it believes that within a few years, your repayment ability would be insufficient or non-existent. Certain banks, on the other hand, may be ready to issue a short-term house loan. Short-term loans with hefty monthly payments would undermine the ease of obtaining a house loan in the first place. As a result, the borrower’s age has a considerable influence on the denial of a house loan.


Maintaining a strong CIBIL score is essential for getting a house loan authorised. Before applying for a house loan, be sure you have a high CIBIL score. To be qualified for a house loan, you must have a good CIBIL score. As a result, applicants for house loans must have a CIBIL score of 750 or better. CIBIL maintains track of each person’s credit score (Credit Reports and Risk Management Solutions).

Debt in the Present

If you apply for a house loan when you are still in debt from past loans, the bank may reject you since your obligations outweigh your income. The bank is afraid that your residual income (after you have paid all of your present expenditures) would be insufficient to pay the EMI that will be desired for the home loan.

No Previous Work Experience

Banks favour employees who have been with the same firm for at least a year. The number of years of employment is used by the bank to estimate the borrower’s stability and repayment possibilities. As a result, when it comes to bank approval of house loans, freshers are not favoured. Applicants who have moved employment often may have their applications denied for the same reasons.

Possession of Property Illegally

Banks investigate if the property has been authorised by local authorities. The loan may be refused if the bank fails to fulfil certain limits imposed by local authorities. Banks, on the other hand, do due diligence on contractors before funding their projects. Even if the property is authorised, your prospects of getting a mortgage are minimal if you choose a builder who is not approved or is on the bank’s blacklist.

Rights to Minor Property

If the property you intend to buy has minor rights, you may be denied a mortgage. Your home loan application is likely to be declined if the seller has not revealed information regarding a minor with ownership rights. Banks may refuse mortgage applications for residences with minority rights. If the seller fails to reveal that the property is held by a minor, the bank is likely to reject the application.

Returns on Investment

Before obtaining a house loan, banks and lenders check for a continuous track record of filing income tax returns for the previous two years. You must submit an income tax return each fiscal year, even if your employer does not furnish Form 16. Banks and lenders seek for a demonstrated track record of submitting income tax returns before issuing a home loan offer.

If you have a poor CIBIL score, you may learn how to improve your CIBIL score so that you can acquire a house loan in India. Furthermore, you should verify your CIBIL score before applying for a house loan to avoid rejection. Multiple loan rejections might further reduce your CIBIL score.


Read Also: Instructions For Uploading Videos On Avple Website

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *